News From Terre Haute, Indiana

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September 16, 2010

Coal liquefaction plant eyes Newport

TERRE HAUTE — A feasibility study will determine by early next year if a direct coal liquefaction plant, along with 500 jobs, will be constructed on a 1,500-acre site at the former Newport Chemical Depot in Vermillion County.

Clean Coal Refining Corp. is paying for the study, expected to be completed by the first quarter of 2011, with a decision to develop a facility expected by the second quarter of 2011, said Marty Irwin, director of the Center for Coal Technology Research at Purdue University.

Lt. Gov. Becky Skillman directed the center to provide support for the project.

“If built, the project would mean a $3 billion investment and jobs for 500 highly skilled Hoosiers,” Skillman said Wednesday in a statement.

The plant would require about 2.5 million tons of Indiana coal annually to produce about 8 million barrels of an oil, the majority of which would be further refined into diesel fuel or heating oil, as well as fuel for power plants or even possibly coal-derived jet fuel, Irwin said.

Statewide, the need for such coal would create about 160 new coal mine jobs, Irwin said. “And each coal mine job generates three to four other supporting jobs,” he said.

The liquefaction of the coal occurs through a hydrogenation process in a reactor at high pressure and temperature, according to the Skillman’s office. The coal is neither burned nor gasified at the onset, thus limiting emission of carbon dioxide. The carbon dioxide that is generated occurs during the manufacturing of hydrogen (mainly from natural gas) and will be captured for industrial use.

If the project is a go, it will take two to three years to construct, meaning hundreds of construction jobs, plus suppliers, said William Laubernds, executive director of the Newport Chemical Depot Reuse Authority.

“We are quite excited about this project. There are still a lot of pieces to put together and several steps to go,” Laubernds said. “We have the resources in terms of infrastructure capacity with natural gas, electricity and water to accommodate a project of this size. And at the same time, we can still preserve a lot of natural areas on the [former] depot.”

The project would also produce an increase in the local tax base, Laubernds said.

The Reuse Authority expects to own about 6,800 acres of the former U.S. Army depot by the first quarter of next year, with other land deeded to it once the Army completes remediation efforts, Laubernds said.

The feasibility study, Irwin said, will review technology necessary for specific types of coal available in Indiana and markets for the fuel. “Most of it will be in the form of diesel fuel or a variation of diesel fuel. It is not a final refined product. It would go to BP [Whiting Refinery] or CountyMark [refinery in Mount Vernon] or someplace else for final refinery. The study will look at who will use it and how much do they want,” Irwin said.

“It is how you adjust the technology to fit the demand for which product is really a key part to this. You can produce several items,” Irwin said.

Indiana has about a dozen types of coal, Irwin said. The coal best for producing a liquid oil is Brazilian Block coal, a product in abundance within a 60-mile radius of the former depot, Irwin said.

The proposed plant would use “a variation of a technology that has been used in the past, but not used this way,” Irwin said.

“One of the key parts to this is that if you use Indiana coal, which has sulfur in it, the sulfur actually helps in the breaking down of coal into a liquid. So this is one of the few times having high-sulfur coal is a good thing,” Irwin said.

Clean Coal Refining Corp. is part of a global energy firm specializing in the development and financing of solar energy projects, clean coal technologies and seaport infrastructures, according to the Skillman’s office.

Howard Greninger can be reached at (812) 231-4204 or howard.greninger@tribstar.com.

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